This report is read as follows:
At present, when the duck industry is booming, the company, as the "duck king of the world", will fully benefit from the prosperity of the industry.
At the same time, with the deepening of the reform of the company's state-owned enterprises, the company's efficiency has been improved into the fast lane.
Main points of investment:
Our task, the duck chain boom has risen in an all-round way, the company's duck fry, frozen duck, duck down business will lead to sustained growth. With the deepening of the reform of state-owned enterprises, the improvement of internal governance will significantly improve the operational efficiency of the company and open up the flexibility of medium-and long-term performance. We maintain the estimated EPS of 0.38,0.53 and 0.60 yuan for 18-20 years, maintain the target price of 10.13 yuan, and maintain the "overweight" rating.
The company released its three-quarter report for 2018, and the results were in line with expectations. In the first three quarters of 2018, the price of the company's main products rebounded sharply, the company's revenue increased by 43.7% to 4.152 billion yuan, the company's net profit increased by 81.49% to 88.8058 million yuan, and non-net profit increased by 37.89% to 54.2185 million yuan. The net cash flow of the company's operating activities was 341 million, an increase of 161.76% over the same period last year, and contributed 322 million of the net cash flow of operating activities in the third quarter alone, a sharp increase of 2642.5% over the same period last year.
We judge that due to the impact of the increase in the price of environmental protection and related alternatives, as well as the withdrawal of production capacity due to industry losses after 2011, duck prices have entered a period of rebound, which will continue until at least 2019, leading to explosive profit growth in the duck industry chain. At the same time, due to the shrinking duck production and rising prices of cotton substitutes, down prices continue to rise, and with the increase in the slaughtering capacity of the company's meat ducks, the company is expected to produce 8300 and 11100 tons of raw wool in 18-19, and the duck feather business alone is expected to contribute 100% + growth.
The reform of the company's state-owned enterprises has been continuously deepened, and the operating efficiency has been significantly improved, opening up the flexibility of future performance. Internally, the company adopts a flexible management system, relaxes the recruitment restrictions on subsidiaries and introduces more social talents; the incentive mechanism has also been reformed to cash in rewards and punishments through the implementation of margin system and excess reward system to enhance the enthusiasm of employees. Externally, the company will strengthen the management and control of dealers, adopt the dealer shareholding system, mobilize the enthusiasm of dealers, and the improvement of efficiency will open up the flexibility of medium-and long-term performance.
Risk hint: the risk of epidemic disease and the rise in duck prices are not up to expectations.